Correlation Between Usio and Widepoint

Can any of the company-specific risk be diversified away by investing in both Usio and Widepoint at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Usio and Widepoint into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Usio Inc and Widepoint C, you can compare the effects of market volatilities on Usio and Widepoint and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Usio with a short position of Widepoint. Check out your portfolio center. Please also check ongoing floating volatility patterns of Usio and Widepoint.

Diversification Opportunities for Usio and Widepoint

0.5

Correlation Coefficient

Usio  Widepoint

Very weak diversification

The 3 months correlation between Usio and Widepoint is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Usio Inc and Widepoint C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Widepoint C and Usio is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Usio Inc are associated (or correlated) with Widepoint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Widepoint C has no effect on the direction of Usio i.e., Usio and Widepoint go up and down completely randomly.

Pair Corralation between Usio and Widepoint

Given the investment horizon of 90 days Usio is expected to generate 23.76 times less return on investment than Widepoint. But when comparing it to its historical volatility, Usio Inc is 2.22 times less risky than Widepoint. It trades about 0.01 of its potential returns per unit of risk. Widepoint C is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  377.00  in Widepoint C on September 1, 2024 and sell it today you would earn a total of  131.00  from holding Widepoint C or generate 34.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Usio Inc  vs.  Widepoint C

Usio Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Usio Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Usio is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Widepoint C

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Widepoint C are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Widepoint showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Usio and Widepoint

The main advantage of trading using opposite Usio and Widepoint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Usio position performs unexpectedly, Widepoint can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Widepoint will offset losses from the drop in Widepoint's long position.

The idea behind Usio Inc and Widepoint C pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.